Manifesto

- noun, a public declaration of intentions, opinions, objectives, or motives

NextForge is committed to preparing our clients for the ever-accelerating pace of change in today’s business environment. We believe this requires a fundamental shift in the approach to initiative design and implementation. Success depends on revitalizing traditional methodologies and significantly growing organizations’ internal capacity for change.

Traditional points of control have matured to the point of “commodity” practice: management frameworks, business objectives, and improvement tools.

Many organizations have become dependent on external support, and the mutual benefit of these relationships seems imbalanced.

Both clients and consultants must respond differently.

Our four tenets below outline how businesses can respond to a dynamic marketplace and become more self-sustaining in advance of the next change.

Management as a construct to direct and synchronize the industrial revolution has matured. If there is any doubt, take a look at the great recession, when struggling with financial survival, contemporary managers realized they could get by with significantly fewer resources. The unmasking of this hidden reserve is just one of the subtle indicators we find ourselves wrestling to put into context.

Recently Gary Hamel, originator of many leading management concepts, presented a number of ideas that identified emerging demands on enterprise management teams; he argued that industrial management disciplines have reached an s-curve plateau, and that the collective response will define competition and strategy. A key conclusion of the discussion was that the only non-commodity element in the production of goods and services is the innovation of management discipline.

We believe that not only “how” the business is managed is common across competitors, but the guiding objectives to which they aspire are also difficult to differentiate: growth, cost reduction, productivity, and profitability to name a few. Accepting these constraints, strategies are often an outcome of tactical objectives, and companies become dependent on the promises of business improvement initiatives to meet their performance commitments.

Innovators are already exploring new concepts that will define the next management s-curve. At a point of transition such as this, organizations must broaden their capability base and prepare for multiple scenarios:

Identify and move to the next s-curve through targeted, controlled “experiments”

Consolidate performance gains through broad dissemination of established “best practices”

Bring longer-term content expertise in house, seeking out deep content expertise only where a critical or temporary need exists

The theme of management control points maturing to the level of “commodity” status is further extended by Bain Consulting’s Management Tools Survey, now it its 12th edition over 16 years. These field-tested methodologies are sound and have been continually improved; our expectation is that they will continue to serve organizational improvement efforts for some time to come. However, we would note that many if not most “new” methodologies are evolutionary enhancements, not revolutionary ideas even when marketed as such. Once again, these tools are also well known across industry competitors.

Mature tools and methodologies can become “too comfortable” and begin to lose effectiveness through rote application, or the full toolset replaced by a few familiar routines. By example, a traditional management response to performance gaps is to catalog and rank opportunities according to potential impact and cost, the Pareto analysis. Often lost are the smaller opportunities within the control of most employees that in the aggregate may yield a greater return (see Pareto’s Lesson on How).

We believe these proven concepts can be rejuvenated by changing the way people work together, managing to a defined performance improvement process, and instilling the discipline of continuous improvement as a core job requirement.

Leadership alignment, including vision and roadmap

Comprehensive, integrated approach to change (work streams)

Project management and execution

Collaborative technologies

Strategic and tactical planning embedded in day-to-day routines

Compelling techniques are emerging in companies like Cisco, P&G, and others. When integrated correctly, these industry leaders have the ability to increase buy-in and communication for a more effective solution, reduce the cost of delivery, and concurrently build internal improvement capability.

Companies should own and constantly refine their business improvement capability.

Large organizations are facing ever-growing challenges. Much has been written on the business environment and the need to respond to growing pressures more quickly than ever before. Some 83% of CEOs expect to face the need for substantial change, not “single-axis” change, but complex change. These same CEOs report that fewer than half of projects are completed successfully.

The challenge to drive these waves of improvement has led to an over-reliance on outside resources, despite the growing internal capability of organizations to respond and the inherent competitive advantage of doing so quickly.

Change initiatives must now deliver on two fronts simultaneously:

Drive business value through execution of the defined issue and scope of work. In order to be sustainable. These efforts must drive broader engagement of the organization and create understanding and ownership at all levels.

Build a sustainable capacity within the organization to identify emerging needs for change and to respond quickly to those needs. As change cycles become larger and more frequent, the organization must become more adept and efficient at responding; otherwise the costs (time and money) become overwhelming. Worse yet, the change cycle can become shorter than the time it takes to implement.

The relationship between clients and consultants has not evolved to meet current needs.

While there are a number of good reasons to bring in outside resources, part of the consulting ethos, now and going forward, should be to assist you in increasing your internal improvement capabilities. When should you consider outside resources? See our post on “Why Hire Consultants” for an overview of the benefits and drawbacks.

Tolerance is waning for the traditional disruption of large consulting teams, and the selection process must ensure a fit-for purpose dimension. Additionally, “outsiders” must utilize existing capabilities and infrastructure (vs. importing redundant resources and competing infrastructure).

The traditional consulting model is already evolving to meet some of these new requirements. Companies like SAB/Miller, Exxon, and BP have recognized the need for increased ownership of strategic initiatives, and routinely create their own “internal consulting” capability: projects are supported by building teams of internal resources (i.e. future leaders) and a mix of external support from multiple firms, foregoing the “single firm” project. Early efforts are underway on the supply side as well (e.g. Projjix, MSquared, MIX).

These are positive steps, but in these examples a comprehensive approach to addressing both change fronts is still lacking. A new relationship with consulting firms is needed, one that proactively reduces client dependency and cost.